What’s up with Zimbabwe’s out of control inflation?
Long Answer
Zimbabwe made headlines for their country’s out of control hyperinflation. It still does. The small, southeastern African country has had wildly spiking inflation for decades. In 2023, the fight against it continues. June of this year saw the year-to-year inflation rate enter triple digits once again after almost a half-year hiatus with the rate being measured at 175.8% by the Consumer Price Index. An increase of 89.3% from the previous month.
When comparing the inflation rate to November 2008 where Zimbabwe saw inflation blow apart the ceiling by hitting 79.6 billion percent, it’s a heck of a lot better. Each day prices would double from the previous day’s price. The issues weren’t new. Reported by the Atlantic in July of 1987 in a piece titled, “Zimbabwe: Poised on the Brink “ by Jack Shepherd, the author stated the economy was “barely limping along”. Most contribute the nation’s never-ending inflation battle with former President Mugabe’s corrupt economic decisions during his 30 year reign beginning in 1987 and ending in 2017 when he was forcibly replaced by his successor, Emmerson Mnangagwa.
Attempting to battle the inflation, Zimbabwe’s official currencies have also shifted during this time period. 1989 had ZWD, the Zimbabwean Dollar, until 2009 when it became ZWL which removed 12 zeroes from the previous version. At one point in time, you could transact with a 1 billion Zimbabwean Dollar note with the highest note reaching a 100 trillion. But ZWL was quickly devalued following the re-issue and then switched to RTGS in 2019 which continues to be referenced as ZWL. For a time, they attempted to ban foreign currency in 2019 before reversing their position. Currently, USD is their official currency and ZWL continues to be accepted although most citizens’ transactions are in USD.
To strengthen their economy, the country is implementing monetary policies such as:
- Allowing foreign currency to be considered an official currency by the government
- Issuing gold coins backed by the Zimbabwean Dollar
- Exploring the possibility of digital currency
The Zimbabwean one billion dollar banknote may no longer be in circulation, but for the low, low price of $2.79 on eBay you can buy the historic memento which will continue to be remembered as a country with one of the highest inflation rates.
Short Answer
Hyper. The inflation is hyper inflated. Some may even call it…hyperinflation.
Unfavorable economic decisions were made by former President Mugabe which tanked Zimbabwe’s economy. The country is attempting to pull itself out of the hole which was dug by exploring ways to strengthen the Zimbabwean Dollar, decrease the high inflation and restore the population’s trust in the government.
Originally published at https://melissanakyeyune.com on July 30, 2023.
